Question:
( 1 of 10 ) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 8 years.
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
$5300
Correct Answer
$6996
Solution And Explanation
Solution
Given,
Principal (P) = $5300
Rate of Simple Interest (SI) = 4%
Time (t) = 8 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $5300 × 4% × 8
= $5300 ×4/100 × 8
= 5300 × 4 × 8/100
= 21200 × 8/100
= 169600/100
= $1696
Thus, Simple Interest = $1696
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $1696
= $6996
Thus, Amount to be paid = $6996 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $5300
Rate of Simple Interest (SI) or (R) = 4%
And, Time (t) = 8 years
Thus, Amount (A)
= $5300 + ($5300 × 4% × 8)
= $5300 + ($5300 ×4/100 × 8)
= $5300 + (5300 × 4 × 8/100)
= $5300 + (21200 × 8/100)
= $5300 + (169600/100)
= $5300 + $1696 = $6996
Thus, Amount (A) to be paid = $6996 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $5300, the simple interest in 1 year
= 4/100 × 5300
= 4 × 5300/100
= 21200/100 = $212
Thus, simple interest for 1 year = $212
Therefore, simple interest for 8 years
= Simple interest for 1 year × 8
= $212 × 8 = $1696
Thus, Simple Interest (SI) = $1696
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $5300 + $1696
= $6996
Thus, Amount to be paid = $6996 Answer
Similar Questions
(1) Find the amount to be paid if Patricia borrowed a sum of $5150 at 8% simple interest for 7 years.
(2) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.
(4) What amount will be due after 2 years if James borrowed a sum of $3000 at a 5% simple interest?
(5) William had to pay $3710 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8378 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 6% simple interest?
(8) Find the amount to be paid if Linda borrowed a sum of $5350 at 6% simple interest for 7 years.
(9) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 8% simple interest.
(10) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 10% simple interest.